http://www.bbc.com/news/business-31442760
According to the article, the US experienced a sudden and unexpected drop in retail sales in the January fiscal month, led by dropping car sales and gas revenues with a fall in oil prices. Economists had expected the US economy to take low oil prices in strength, coupled with stronger labor markets and consumer confidence. Growth forecasts for the US have been demoted to below 3%.
These disappointing results have an array of possible causes or contributors: though consumer confidence may be up, the fallout from the recession, including lost wages, jobs, and portfolio performance may have encouraged personal-level fiscal conservatism, with the public more willing to save than before in anticipation of further instability or simply as a "lesson learned" from the recession. New household receipts may be going to pay off existing debts as well. Moreover, concerns over the Greek economic situation may be promoting uncertainty in consumer's minds, leading to retraction in their willingness to spend. However, since consumer confidence has gone up to pre-recession levels, the more likely cause of this is a greater consumer propensity to save despite confidence in economic resurgence as a result of personal losses or debts incurred during the 2007 recessionary period.
4 comments:
I think it's not really surprising the sales dropped. People spent so much money on Christmas and black Friday so of course they will cut down spending the following month.
I agree the first few months of the year are a tough time for retailers because consumer spending is down. The retail market also has a large number of substitutes and even though cosumer confidence is up people still are concerned with saving. So this effects those retailers trying to push higher price points.
I agree with Lily that it is not unusual that the January sales are not really strong, as there are no holidays or reasons such as back to school, changes in season that people need to buy new or additional goods.
I agree with the previous comments. I feel as though spending in January is never very high in comparison to December because of the holiday rushes and other such things. I would be interested to see how this past December compared to previous years. I feel as though looking at December's statistics would give us more of an idea of consumer's confidence levels.
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